On March 18, 2020, President Trump signed into law the Families First Coronavirus Response Act. The important part for employers is it enacts temporary measures requiring employers with fewer than 500 employees to provide paid sick leave and family leave for those directly affected by COVID-19.
It is important to note that these measures are temporary. They become effective on April 2, 2020 but will expire by December 31, 2020, unless Congress enacts additional legislation to extend them. The Act also provides the Secretary of Labor the ability to exempt smaller businesses if these types of leave would cause hardship. We are monitoring these new rules and will update our clients as this unfolds.
A summary of the Act is as follows:
PAID SICK LEAVE
Under the new Act, Employers are required to provide paid sick leave to all employees if:
- The employee is subject to a Federal, State, or local quarantine or isolation order related to COVID–19.
- The employee has been advised by a health care provider to self-quarantine due to concerns related to COVID–19.
- The employee is experiencing symptoms of COVID–19 and seeking a medical diagnosis.
- The employee is caring for an individual who is subject to an order as described in paragraph (1) or has been advised as described in paragraph (2).
- The employee is caring for a son or daughter of such employee if the school or place of care of the son or daughter has been closed, or the child care provider of such son or daughter is unavailable, due to COVID–19 precautions.
- The employee is experiencing any other substantially similar condition specified by the Secretary of Health and Human Services in consultation with the Secretary of the Treasury and the Secretary of Labor.
Full-time employees will receive 80 hours of paid sick leave and part-time employees will receive the pro-rated amount equal to the average amount of hours they work in a two-week period. The daily rate is capped at $511 for reasons 1 through 3 above or $200 for reasons 4 through 6. The sick leave will be granted in a lump sum when the Act is effective on April 2, 2020 and is in addition to any current leave benefits the employer provides.
PAID PUBLIC HEALTH EMERGENCY LEAVE
Under the Act, an Employer must provide an Employee with up to 12 weeks off if the employee is unable to work (or telework) due to a need for leave to care for the son or daughter under 18 years of age of such employee if the school or place of child care has been closed, or the child care provider of such son or daughter is unavailable, due to a public health emergency. An employee is eligible if they have been working for the employer for 30 days.
This leave will be unpaid for the first 10 days unless the employee chooses to substitute paid time off; however, an employer may not require employees to substitute paid time off. After the initial 10-day period, employers will be required to provide employees with partially paid leave equal to two-thirds of their current rate of pay, which is capped at $200 per day. This paid leave is “job-protected” with some exceptions for smaller businesses with fewer than 25 employees.
In order to help employers cover the cost of these types of leave, employers can claim a payroll tax credit for the amount of leave and the health insurance contribution during the leave. If the amount exceeds the payroll tax owed, the IRS will send a refund check. Please discuss this issue with your accountant.
In two weeks, the Act will be effective and employers are required to provide notice to their employees. Employers should implement policies addressing these new leave requirements and inform their employees as soon as possible.
We are here to help! As you are navigating this health emergency, please feel free to contact Ginny Cascio Bonifacino at email@example.com or Natasha M. Nazareth at firstname.lastname@example.org.